GM said the joint venture will initially use two existing factories and have a capacity of over 100,000 vehicles.

China is a key growth market for GM, which has said it plans to expand here despite its difficulties in the U.S. market.

The 50-50 joint venture will make FAW-branded vehicles for the Chinese market, GM said.

Production will be at the existing factories in southwestern China's Yunnan province, a facility owned by FAW-affiliate Hongta Yunnan Automobile Manufacturing Co. Ltd., and in the northeastern city of Harbin, GM said in a statement.